Acerinox, a company in the manufacturing and distribution of stainless steel and high-performance alloys, has entered into a definitive agreement under which Acerinox’s wholly owned U.S. subsidiary – North American Stainless (NAS) – will acquire Haynes International, a U.S. leading developer, manufacturer and marketer of technologically advanced high performance alloys, in an all-cash transaction. Under the terms of the agreement, Acerinox will acquire all the outstanding shares of Haynes for $61.00 per share in cash, which represents a fully diluted equity value of $798 million, and a premium of approximately 22 percent to Haynes’s six month volume weighted average share price for the period ending February 2, 2024. The all-cash transaction values Haynes at an enterprise value of approximately $970 million. The transaction has been unanimously approved by the boards of directors of Haynes and Acerinox.
“This acquisition is aligned with Acerinox’s key strategic priority of enhancing our focus on value-added products with an emphasis on excellence and sustainability, building on our successful acquisition of VDM Metals in 2020,” Carlos Ortega Arias-Paz, chairman of the board of Acerinox, said. “The Haynes team has built a leading high performance alloys business that will now be supported by Acerinox’s global operating and financial strength.”
Acerinox plans to finance the transaction using existing available cash on its balance sheet. The transaction includes the absorption of Haynes’s debt and other adjustments of approximately $172 million. The pro-forma debt of Acerinox is expected to reach 1.5x NFD/EBITDA in 2024, and then fall to 1.2x in 2025, in line with Acerinox’s target through the cycle.
The transaction is expected to be immediately accretive to Acerinox’s earnings per share in its first year of ownership, even prior to the realization of $71 million in estimated annual synergies. In addition, the return on capital employed (ROCE) target of 15 percent is expected to be reached in year one.
The transaction is expected to close in the third quarter of 2024, subject to receipt of regulatory approval and the satisfaction of customary closing conditions, including approval by Haynes shareholders. Upon completion of the transaction, Haynes’s shares will no longer be traded on the Nasdaq, and Haynes will become a wholly owned subsidiary of Acerinox.